The Central Bank of Ireland issued new lending measures for credit unions and these measures will come into effect from January 2020. These measures will allow credit unions to undertake increased longer term lending, including home mortgage and business lending. Further additional capacity is to be extended to larger, stronger credit unions that meet certain requirements.
The changes in the measures with respect to the proposed measures include removal of the existing lending maturity limits, which cap the percentage of credit union lending that may be outstanding for periods of more than 5 and 10 years. The maturity limits will be replaced by the new concentration limits, on a tiered basis, for home mortgage and business loans, expressed as a percentage of total assets. There are the following three tiers under the changes:
- A combined concentration limit for house and business loans of 7.5% of total assets for all credit unions
- A 10% limit, conditional on a credit union satisfying asset size (at least EUR 50 million) and regulatory reserves qualifying criteria and notifying the central bank in advance
- A 15% limit for credit unions with total assets of at least EUR 100 million, subject to the approval of the central bank
These changes follow a comprehensive review of the lending framework for credit unions. Following the review, on October 24, 2018, the Central Bank of Ireland had published a consultation on potential changes to the lending framework for credit unions. The consultation had sought views from credit unions and other sector stakeholders on the proposed changes. The Central Bank of Ireland has also published the responses received to this consultation, along with a Feedback Statement.
Keywords: Europe, Ireland, Banking, Credit Unions, Lending Rules, Credit Risk, Regulatory Impact Analysis, Central Bank of Ireland
Previous ArticleCNB Publishes Results of Stress Tests on Banks and Insurers
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.